Net sales for the January-March quarter, however, went up by 32.4% to Rs 6,308.35 crore, mainly on a 17% sales rise. The company sold 2,36,638 units in the quarter vis--vis 2,02,219 units a year ago.
For 2008-09, Maruti announced a lower dividend of 70%, which would cost the company Rs 101 crore, against 100% for 2007-08.
Marutis shares closed up 0.33% at Rs 802.25 on the Bombay Stock Exchange.
For the full year, the company reported a 31.42% dip in its net profit at Rs 1,227.45 crore compared to Rs 1,789.87 crore in 2007-08. This was the first decline in net profit for the company in a financial year in the last eight years. The last time it posed an annual dip in net profit was for 2000-01.
Net sales for the year went up by 13.9% at Rs 20,358.28 crore versus Rs 17,860.28 crore. The company recorded 3.57% growth in total sales at 7,92,167 units in 2008-09, the highest in its 25-year history.
The company seeks to strengthen its market dominance with capital expenditures of Rs 1,800 crore this year. A huge part of it will go into the launch of new models, enhanced focus on R&D and marketing, along with upgradation of existing plants, said Ajay Seth, chief financial officer, MSI.
According to Seth, while the companys sales expenditure went up by Rs 62 crore, or 0.6%, to 5.7%, mainly on discounts, forex losses were a bigger drag. Maruti posted a forex loss Rs 121 crore in Q4 and Rs 350 crore in the full year on high dollar fluctuations. To stem this, Maruti said it would focus on more indigenisation. Though its small cars like the Alto have an indigenisation level of 95%, in upper-end models like the SX4, about 15 to 20% parts are imported.
The auto industry faced a lot of challenges in the fiscal 2008-09, with issues of lack of retail financing, increased commodity prices and foreign exchange fluctuations impacting the bottom line of all players in the industry, said Shinzo Nakanishi, MD & CEO, MSI.
Though Nakanishi refused to project sales for 2009-10, he said, the future looks uncertain and 2010 could be another volatile and a difficult year. The company might resort to harsher steps like cutting down costs further and passing on the one gram, one component campaign to tier-II vendors as well to maintain profitability even when the impact of softened commodity prices will get reflected in the coming quarters, he said.